As Requested: Transcripts of My Worldwide Trek!

Last week, I wrapped up my first series of on-site video reports from three of the world’s likely hot spots — Italy, Turkey and the Arabian Peninsula.

Readers are raving about the thrill of virtually traveling along with me and witnessing the global impact of deepening local conflicts.

But there are also some readers who are unhappy for one simple reason: They don’t like to watch videos — they just want to read the information.

I get the message.

In response, here are the transcripts of my first two videos on this worldwide trek. If you missed the videos, this is your opportunity to catch up. And if you saw them, this is your chance to get my updates on the most recent events …

First Stop: Italy

This is the financial capital of Italy, the third largest economy of the European Union, and the one country in the entire world with the most megabanks on the brink.

Consider this bank, for example, UniCredit SpA. We give it a Weiss Safety Rating of D. That’s a reliable indication of a much higher-than-average probability of financial difficulties. And yet this bank has over $1 trillion in assets, making it one of the biggest in the world.

But it’s not the only one.

Banco Popolare SC has $139 billion in assets and we give it a Weiss Rating of D- …

And as I said, UniCredit SpA, with over $1 trillion in assets, gets a Weiss Rating of D.

Now, if the Italian government could easily come to the rescue, it might not be such a big problem. But the Italian government itself has more debt in proportion to GDP than any other country in the European Union except Greece.

Or, if the European Union could easily come to the rescue of the Italian economy, like it did for Greece, then maybe that would at least postpone the day of reckoning.

But that’s virtually impossible: Italy’s public debts are eight times larger than Greece’s. Its economy is ten times larger. And its banks have far more assets in jeopardy.

In other words, it’s wrong to say Italy is too big to fail. In reality, it’s too big to save.

But can Italy truly save itself? For an answer, I spoke to our friends here in Italy, along with average citizens from all walks of life. When I asked them if Italy can save itself from the next banking crisis, the near unanimity of their answer was shocking:

It will be extremely difficult, if not impossible.

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Luciano, for example, is an astute businessman and investor from Viareggio in Northern Tuscany, with some very strong views on the obvious dangers ahead for Italy and all of Europe.

Former comedian Beppe Grillo is turning Italy upside down with a rising tide of popular support to dump the EU.

"In the U.S.," he says, "you have Donald Trump. Here, we have Beppe Grillo. Trump is a professional businessman and he’s not funny. Grillo is a professional comedian and he’s even less funny. His political movement, called the ‘Five Star Movement,’ is now the most popular party in Italy. He wants to abandon the European Union precisely when we’re going to need the EU the most."

Elisabeth’s old friend Giuseppina, is a very warm, kind-hearted and retired office manager from Piacenza, but also not hesitant to speak her mind.

"Even before any new financial crisis," she says, "poverty in Italy is the worst for at least a decade."

Indeed, there are almost 5 million Italians living in what is officially defined as "absolute poverty." Plus, there are more than 8 million living in "relative poverty."

In this context, most average Italians don’t understand the big fuss about Brexit. It’s the crisis in Italy, they say, that could destroy Europe.

Judgment day for Italy will come this year, probably in October. That’s when the prime minister is holding a constitutional referendum.

If the referendum passes, it will end the Italian government as we know it today. If it doesn’t pass, the prime minister will have to resign. Either way, Italy will face political turmoil precisely at a time when its banks could be facing financial ruin.

We knew from news reports that the situation in Italy was deteriorating rapidly. But now that I’m here and I’ve had the opportunity to talk to Italian citizens from all walks of life, I can tell you that it’s actually a lot worse than we realized.

This could be the epicenter of the next debt crisis — not only in Europe, but globally. Right now, it’s driving capital to U.S. markets, and will likely continue to do so.

But at some point — that capital flow may reach a dead end. In the meantime, my recommendation is unchanged: Invest in extreme high-quality and with great caution. Above all, continue to build cash.

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Second Stop: Turkey

This is Istanbul, Turkey, the cross-roads of the greatest East-West conflicts in the history of the world.

Everyone who I’ve spoken to here — on the streets, in the cafés and in investment circles — is shocked by the recent turmoil. But anyone who has studied Turkey’s past, or truly understands its political culture today, should not be shocked at all.

Consider the Hagia Sophia, which Elisabeth and I just visited.

For 1,113 years, this was a Christian church. But then in 1453, four decades before Columbus discovered America, it fell to Sultan Mehmed, who conquered this city and converted the Hagia Sophia into a mosque.

Then, 63 years later, right across the park, Sultan Ahmed built the great Blue Mosque. His explicit goal was to literally overshadow the Hagia Sophia and to send a message to the world about the rising power of Islam.

These events were not just local or symbolic. When the Hagia Sophia was a church, Turkey was an integral part of the Christian Byzantine Empire, stretching from Spain to Judaea to North Africa.

And when the Hagia Sophia was a mosque, Turkey was the center of the Muslim Ottoman Empire, encompassing nearly half of Eastern Europe, the Balkans, the Middle East and again North Africa.

That’s the history. Now fast forward to the present.

Today, this country is the primary gateway for Jihadists on their way from Europe to join ISIS in Syria … and for Jihadists again on their way back from Syria to launch terrorist attacks in Europe. Plus, it’s also the primary gateway for over a million war refugees and migrants who have fled the Middle East.

Just last month, the government suffered the most massive coup attempt of any NATO nation in history.

And right now, everyone here is engulfed in — or surrounded by — an equally massive purge of the military, the courts, the universities and the media.

Just in the last few weeks, thousands have been thrown in jail. Tens of thousands have been dismissed from their jobs. Almost every institution of this society has been turned inside out and upside down.

Even the army, which has traditionally been the number one stabilizer of the modern Turkish state, is now in disarray.

Step by step, President Erdoğan has been pivoting Turkey to Islam and to the East.

And at nearly every step of the way, forces loyal to Western interests and culture have been attempting to stop him.

The recent coup was the most desperate and dramatic such attempt.

But it backfired.

And now, that same coup has given Erdoğan the excuse he wanted to clean house and get rid of any West-leaning elements of society. He says he’s trying to form something that’s "more perfect."

Not "a more perfect union." But rather, "a more perfect Islamic nation."

Again, all this seems to have taken the U.S. State department by surprise. But anyone who knows modern Turkey well enough should not be surprised at all.

Here’s what I mean …

For 42 long years, Turkey has occupied Northern Cyprus, an island nation which is now a member of the European Union.

This has always been a major thorn in the side of Western Europe. But nothing that Europe has said or done has made one whit of a difference. Turkey continued to occupy Northern Cyprus.

The fact is Turkey has always wanted to influence — or even dominate — the politics of the Middle East.

In April of this year, for example, Turkey made major efforts to court Iran, including a $30 billion bilateral trade deal.

And perhaps most interestingly …

Turkey controls the waters that flow into Syria and Iraq via the all-important Tigris and Euphrates rivers. That gives it massive leverage over the destinies of those two countries.

All of this is very frightening. And with Erdoğan’s massive purges now underway, it’s getting worse by the second.

It’s bound to upset the delicate balance of power in this region, driving still more flight capital to safe havens like the United States. So for now, this East-West crisis is still a positive for U.S. financial markets.

The critical question is:

At what point does this global crisis cease boosting our markets and dragging down the global economy even further? For U.S. investors, when does this crisis morph from a bullish force into a bearish force?

That’s the big turning point my team back home in Florida and I are watching for every week and every day. So count on us to do our best to warn you.

But alas, the conflicts are not limited to Turkey, as you will see when I go to my next major stop-over, the Persian Gulf and the Arabian Peninsula.

Good luck and God bless!

Martin

Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.

{23 comments }

FRANCIS WikkiamsMonday, September 19, 2016 at 8:21 am

Excellent report in terms of clarity. Will read all you have to say on this matter. Thanks and all the best.

Dave HomanMonday, September 19, 2016 at 9:11 am

Dr. Weiss,
Thank you for providing transcripts to your video tour of worldwide economic trigger points. In this case, I actually did watch the video–. My dislike of videos centers on marketing deceit; I’ve seen the beginning of several urgent shocking videos where the presenter promises to address the *Shocking* *URGENT!!!* issue in just 5 short minutes. The five minutes are wasted telling me things that I already know, and then– but wait– first they tell me about who they are, where they went to elementary school, and why they made this video. In a minute they’ll claim to want you to meet their family, but first, please watch this clip of the family dog catching a Frisbee on the beach…. CLICK,

Your short, info packed videos are a great way to communicate; Larry Edelson used to do good weekly updates, too. (However, the print format is way better for graphical data). Some of the better videos claim that they’ll be over in 7 minutes, and end when promised. Marketing may claim that focus groups respond favorably to dogs catching toys on the beach but the focus group may not match the profile of crusty old investors– please continue to respect our time!

A loyal Weiss Research subscriber,
Dave Homan

HAIMMonday, September 19, 2016 at 9:22 am

VERY INTERESTING MATERIAL TO READ.I WONDER IF THESE FACTS ARE CLEAR TO POLICY MAKERS

gordonMonday, September 19, 2016 at 10:08 am

I wish to say thanks Martin for you keeping us up to date. I will take video’s transcripts whatever pearls of wisdom you can throw my way. Complaining seems to be a way of life today. People should be happy to get your first hand experience regardless of how you send it after all its free. Shame on you complainers.

Curtis DuininckMonday, September 19, 2016 at 10:50 am

Martin:
Great reporting, great analysis, but certainly not surprising.
You next stop in the Persian Gulf will reveal the consequences of the lack of leadership by Obama. For good reason, we are losing friends if the Persian Gulf.

H. Craig BradleyWednesday, September 21, 2016 at 7:09 pm

THE RISK OF BEING SEEN AS THE “GLOBAL BULLY”

America is setting itself up ( and us ) to be viewed by our enemies ( China and Russia ) as the Global Bully for some time. Each side will lobby the rest of the world to be sympathetic to their view. As we continue to alienate other nations, the list of former friends will grow longer. Thus, America becomes truly isolated in a dangerous world. We run the risk of direct military conflict with countries like Russia, China, and North Korea who someday may be able to inflict damage and casualties if we become too complacent.

If War ever breaks-out, we could lose or be sidelined by a first strike. Our foreign policy has encouraged belligerents to build-up weapons stockpiles and get ready for a fight. A sickly, weakened president or incompetent would be our worst nightmare by not having a decision-maker in place when most critical.

Scott HartzlerMonday, September 26, 2016 at 10:23 pm

We ARE a world bully!

Scott HartzlerMonday, September 26, 2016 at 10:30 pm

We’ve been a world bully since the 50s. Meddling in Korea, Vietnam, Iraq. We’ve been an economic bully funneling money here and there for decades. If you’ll read the history, the surge in anti-American sentiment was due to our misplaced invasion of Iraq.

JamesMonday, September 19, 2016 at 11:41 am

Has coach Bill Hall any tips for tonight’s Chicago Bears nfl game?

Donald LinkMonday, September 19, 2016 at 12:05 pm

Italy has been a basket case since the end of WW II. Reason: Insane laws, regulations and taxes. Sound familiar? If it was not for the underground economy, the country would have had a second fall of Rome long ago. Italians are worse than the Bourbons who learned nothing and forgot nothing.

Charles A. SloanMonday, September 19, 2016 at 1:59 pm

Martin,

I’ve seen your reports, but I believe reading them is better — at least for me!
Keep safe and God Bless.

Tom ReevesMonday, September 19, 2016 at 2:02 pm

Thanks for the written version of your reporting…my elder brain performs better with the written word…gives me to read…think …and catalogue…

You’re my favorite…thanks

Brent MeredithMonday, September 19, 2016 at 9:36 pm

This was very informative and useful information. I also enjoyed the text version. I can read faster than most videos and when I find something interesting I can stop to absorb it and if it is something less interesting or something I already am aware of, I can quickly skim forward to better materials saving me significant time. I dropped one newsletter when it went to all video updates because I didn’t have time to watch them. Text also takes less bandwidth and doesn’t freeze up like videos often do and doesn’t disturb others around me if I don’t have headphones plugged in, which to me are a pain. I did read all of this report, nothing worth skimming over.

Audrey ColeTuesday, September 20, 2016 at 9:41 am

Thank you for the transcripts of your travels. Videos are a nice travelogue for me, but
I am hearing impaired and receive very little beneficial information from trying to listen.

Your excellent publications and research service provide a solid basis for
investment decisions.

a.delwelTuesday, September 20, 2016 at 3:36 pm

A small fraction of your followers, but probably large in number, is rather deaf, or rather old and slow, or unable to tranlate a quickly spoken english text ito meaningful content in their motherlanguage, or all of this, like me. Therefore hurray for your transcripts.

Tom OwensTuesday, September 20, 2016 at 4:25 pm

Transcripts are preferable to videos. Thanks!

Nestor CebuliakTuesday, September 20, 2016 at 6:15 pm

I agree with with your followers that are in there “Golden Years” they have become somewhat Deaf and find great difficulty understanding what is heard in Videos and on the Telephone, so the transcripts are important for us and we can Best find use of the Great Knowledge and Help you provide. Please continue to provide the transcripts.

Sandeep Arora aWednesday, September 21, 2016 at 7:35 am

Hats off to the analysis, research and insight of the past and current situation Mr. Martin. A perfect commentary how the history has changed course in Europe over centuries

KathyWednesday, September 21, 2016 at 5:03 pm

I agree with Dave Homan.

Donal McNallyWednesday, September 21, 2016 at 7:36 pm

Dear Dr. Weiss,
Thank you and congratulations for making your comments available in written form, which for me is much more efficient than listening to a talking head. I have been following the fate of Banca Monte dei Paschi di Siena (the world’s oldest bank) with interest and I fully agree with your D- rating. What was scary was that you saw the other major Italian banks as no better than D and D+. We often read that Italy is not so badly off as it seems because of the size of the underground economy- but of course, the same was said of Greece and we know how that played out. Please keep up the good work of telling it as you see it!

See belowMonday, September 26, 2016 at 10:24 am

We prefer transcripts over videos because they are faster to scan and let the reader choose what to read.

FreddiSaturday, October 1, 2016 at 7:22 pm

Tell us about Weiss ratings… is D like a public school D?

Andrew SmithMonday, October 31, 2016 at 12:18 pm

I want to both thank Martin for the info he so generously shared
That emanated from hiss recent tour.

Additionally, I want to remind those who seem to define the
USA as an international bully of a few important things that have greatly benefitted theoopulation
of the world’s population, being:
Making the difference between victory and defeat
in world wars 1 and 2; securing land for and
thereby providing South Korea the opportunity
to enjoy a country based on the same freedoms
that we enjoy; bringing a new peaceful end to
the horrifically cruel Soviet Union.

There are countless occasions where the USA has
provided massive relief to countries that have been
victims of massive natural disasters. I could go on
and on.

The best solution for those who define our country
as a bully is for them to visit countries that do not have a
free society and compare them to the benefits of
being a citizen, and apply for citizenship there and
agents out of the USA.